- GBP/USD bulls take a breather following the heaviest jump in 11 weeks.
- Clear break of eight-day-old falling trend line, rebound from short-term key support favor bulls.
- 200-SMA adds to the upside filters, 1.3570-65 will be the key for bears.
GBP/USD defends 1.3700, recently picking up bids near 1.3720, during a pullback from 50-SMA. Even so, the cable pair keeps the previous day’s upside momentum, the heaviest since early July.
That said, a clear upside break of a short-term resistance, now support near 1.3660, joins firmer Momentum and the ability to rebound from a rising trend line from July to keep buyers hopeful.
Hence, the quote is likely to overcome the immediate SMA hurdle near 1.3750 during the further upside. However, 200-SMA near 1.3770 and September 17 swing high near 1.3815 becomes the key resistance to watch afterward.
In a case where GBP/USD rises past 1.3815, the odds of witnessing a fresh monthly high past 1.3913 can’t be ruled out.
Alternatively, Tuesday’s peak near 1.3690 may offer immediate support before dragging the quote to the resistance-turned-support line close to 1.3660.
Even if the GBP/USD bears manage to conquer the 1.3660 support they need to keep reins below an ascending support line from July 20, near 1.3630, to convince markets.
Also acting as the key support are the lows marked during February and July surrounding 1.3570-65.
GBP/USD: Four-hour chart
Trend: Further recovery expected
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